Jan. 30 (Bloomberg) -- Darren McCarthy is learning one
thing from Ireland’s economic woes: how to be a salesman.

“Before the crash you didn’t have to sell,” said
McCarthy, 31, as he took a break from his job in a fashion store
on the corner of Grafton Street in Dublin. “People came in
looking for a shirt to wear and left with jeans and a coat too.
Now you have to work hard to sell.”

For many Dubliners, the thoroughfare is still the heart of
the city, equivalent to Fifth Avenue in New York or Oxford
Street in London. Each Christmas Eve, crowds gather to hear U2’s
Bono perform for charity. Yet now the stars have left and the
lights have come down for another year, the scars of Ireland’s
crash are starting to show.

Retail sales fell 1 percent in December from a year
earlier, the country’s statistics office said this week, as
falling spending puts a brake on Ireland’s economic recovery.

More vacant units are appearing on and around Grafton
Street as the area suffers post-Christmas closures. As doormen
wearing top-hats usher shoppers into Brown Thomas, a department
store selling handbags for as much as 7,000 euros ($9,440),
others, including HMV Group Plc’s outlet, are closed.

“There is no question that people are having to make
further cuts,” said Austin Hughes, chief economist at KBC Bank.
“It is progressing further along the food chain. There’s an
issue for businesses right across the spectrum.”

Buying Online

The decline is more pronounced than across the Irish Sea in
the U.K. December retail sales in Britain rose 0.3 percent from
a year before, with a record proportion of purchases over the
Internet. So far in January, HMV, Britain’s biggest seller of
CDs and DVDs, movie rental chain Blockbuster Entertainment Ltd.,
and camera seller Jessops all entered administration.

Irish retail sales have fallen by about 20 percent since
2008 as home prices plunged, unemployment almost tripled and the
government raised taxes and cut spending to narrow the largest
deficit in western Europe. In a sign of the testing times, less
than 10 percent of retailers are planning pay increases this
year, Retail Excellence Ireland said today.

“The vast majority of retailers who are freezing pay in
2013 are currently struggling with significant operating costs
and decreasing consumer demand,” said David Fitzsimons, the
head of the group. “Some retailers will have to actually reduce
pay and restructure in order to continue trading.”

Different Place

The fallout is being increasingly felt around Grafton
Street, which had so far been immune from the worst of the
crash. Since Christmas, the Apollo Gallery, which sold art by
Rolling Stones guitarist Ronnie Wood, has closed, along with the
landmark HMV store, adding to closures of shoe, clothing and
book stores over the past two years.

“It’s such a different place now,” said David Tee, a
teacher in his 40s who returned to Ireland in the 1990s when the
economy was growing faster than anywhere else in western Europe.
“It’s depressing is what it is,” Tee said, standing on the
street. “It’s just so quiet compared to its heyday.”

Paddy Coughlin, a 34 year-old Dubliner, opened Rare
Clothing Co. on Dawson Street just off Grafton Street four
months ago. He specializes in second-hand designer clothes.

“It wouldn’t have been possible to have been on this
street selling this during the boom,” said Coughlin. “It’s
been tough going, though.”

Spreading Pain

The pain has spread from other parts of Irish capital.
Across the River Liffey, Gordon Brothers in September bought
Clerys department store on O’Connell Street from receivers
appointed by Bank of Ireland Plc.

About one in eight stores around the city’s retail core
spanning both sides of the river were empty in the second half
of last year, Dublin realtor Lisney said.

And a pick-up in retail sales may be some time away. Taxes
are still rising, unemployment is showing little sign of
dropping from about 14.6 percent, and one in four mortgages is
in trouble. Lisney forecasts that discount stores will continue
to “aggressively” expand as others close.

“The retail vacancy rate will rise,” said Fitzsimons at
Retail Excellence. “The consumer is under pressure and there is
a trend of a move away from the center to out of town.”